FlexibleallocationstrategyinvestinginvarioustypesofAsianbonds

Bestideasapproach,unconstrainedbybenchmark

Seekstoprovidecapitalappreciationwhileaimingformonthlydistributions

Q4 2017 Issue

Allianz Flexi Asia BondShaping your investments with a flexible allocation strategy

Why invest in Allianz Flexi Asia Bond (the “Fund”)?• Asiacontinuestoenjoyhighergrowthprospectscomparedtootherpartsoftheworld.• TheFundcapturesinvestmentopportunitiesintheregionbyflexiblyallocatingassetsintoinvestmentgrade and high yield bonds across different sectors and Asian countries, thereby capturing thepotentialdualbenefitsofriskdiversificationandlongtermincome.

AllianzFlexiAsiaBond

Economic growth of Asia outpaces that of Europe and the US• Despite the general economic slowdown, Asia

maystillenjoyhigherratesofgrowthcomparedtootherpartsoftheworld.

• With decent economic growth rates and anenvironment of generally ample liquidity (dueto quantitative easing in Japan and Europe, andaccommodative monetary policies in Asia), theoutlookfortheregionlooksrelativelypromising.

Source: IMFWorldEconomicOutlook(WEO)Update,asat July2017.*ASEAN-5includesIndonesia,Malaysia,Philippines,ThailandandVietnam.Pastperformance,oranypredication,projectionorforecast,isnotindicativeoffutureperformance.

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

US Euro Area Japan Latin America

Emerging Europe

MENA Emerging Asia

China India ASEAN-5*

2015 2016 2017F

2.1 1.9 1.3 1.0

3.5 2.6

6.5 6.7 7.2

5.1

IMF Projections for World Output: Asia vs Other Regions (%)

A continually growing asset class• The Asian fixed income asset class has grown

significantlyinthepast10yearswithagrowingnumber of companies looking to the capitalmarketsforfundingduetotighterbanklendingregulations aswell as todiversify their fundingsources.

• AsianUSD bonds have also seen an increasinglocal investor base supporting new issuances,whichmayhelpmitigatecapitalflightriskswhenthereisadeclineinforeignappetite.

Source: J.P. Morgan, Bond Radar as at 30 June 2017. YTD refers to the periodup till 31 May 2017. The above is for illustrative purposes only and is not arecommendationoradvicetobuyorsell.

4454 55 59 62 61 67

78 78

3326 26 23 20 21

1710 8

23 20 19 18 18 18 16 12 14

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014 2015 2016 2017 - 1H

Asia US Europe

Asia Credit: New issue Allocation by Region

Asian bonds offer variety of choices, attractive yields and diversification benefits• With interest rates at record low levels in the

developedcountries,Asianfixedincomestandsoutwithitsattractiveyields.

• Asian USD credits currently yield about 4%,andrise toover6% forsomehighyieldcredits.

• Asian fixed income demonstrates a relativelylowcorrelationtoglobal fixed incomemarkets.

Source: J.P.Morgan,asat30 June2017.Basedon J.P.MorganAsiaCredit Index(JACI)sub-indices.IGreferstoinvestmentgrade,HYreferstohigh-yield,andSovreferstosovereign.

4.4%3.9%

6.7%

4.0% 3.8%

5.4%

3.7% 3.6%

5.0% 4.8%

4.0%

6.9%

0.0%

2.0%

4.0%

6.0%

8.0%

JACI IG HY

Sove

reig

n

Sov_

IG

Sov_

HY

Quas

i_So

v

Quas

i_IG

Quas

i_HY

Corp

orat

e

Corp

_IG

Corp

_HY

Asian USD Bond Market Yields

Fund Features

Dynamic Allocation Strategy to Invest Across Asian Bond Markets2

• The returns of different types of bonds vary indifferentstagesoftheeconomiccycle;nosinglebond type can persistently outperform all thetimeandindifferentmarketenvironments.

• The Fund can flexibly make allocations todifferent typesand regionsofbondsaccordingto the market environment, with the aim ofmaximisingtotalpotentialreturnoftheportfolio.

• Ourflexibleapproachmeanswecanalsoavoidcountries or sectors where we do not findinvestmentvalue.

Returns of Different Asian Bond SectorsVary in Different Market Conditions

Returns in USD

5%

26%

9% 5%12%

-1%

8%3% 4% 3%6%

-32%

74%

19%

-6%

25%

4% 6% 6%12%

3%8%

1%7%

14%5%

12%

-4%

5%

-4%

1%7%

-40%

-20%

0%

20%

40%

60%

80%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD

Asian Investment Grade Corporate Asian High Yield Corporate Asian Government

-9%

Source: Bloomberg, Allianz Global Investors, as at 30 June 2017. YTD refers toperiod up till 30 June 2017. Past performance or any prediction, projection orforecast,isnotindicativeoffutureperformance.

Potential Monthly Payout1

• TheFundaimstoprovidelongtermcapitalappreciationandincome.

Allianz Flexi Asia Bond AM (USD) Dis.Projected dividend per share for the first half of the Fund’s financial year 2017/2018*

13 Oct 2017 14 Nov 2017 14 Dec 2017(record date)

12 Jan 2018 14 Feb 2018 14 Mar 2018

USD 0.0375per unit

PAID

USD 0.0375per unit

USD 0.0375per unit

USD 0.0375per unit

USD 0.0375per unit

USD 0.0375per unit

Available Share Classes Class AM(USD) Dis.

Class AM(H2-AUD) Dis.

Class AM(H2-EUR) Dis.

Class AM(H2-GBP) Dis.

Class AM(H2-RMB) Dis.

Class AM(H2-SGD) Dis.

Class AM(SGD) Dis.

Monthly Dividend Per Share USD 0.03750 AUD 0.04583 EUR 0.02083 GBP 0.02917 RMB 0.05833 SGD 0.03333 SGD 0.03750

TheprojectedlevelofmonthlydividendisintendedtocoverthefirsthalfofthefinancialyearoftheAllianzGlobalInvestorsFund,fromOctober2017toMarch2018.Actualreviewperiodandprojectedmonthlypayoutcoveringperiodaresubjecttochangewithoutpriornotice.Currencyhedgedshareclasses(asdenotedbytheprefix“H2-”)maybesubjecttoshortertermchanges,subjecttoforeignexchangeimpliedinterestratemovements.*Actualreviewperiodandprojectedmonthlypayoutcoveringperiodaresubjecttochangewithoutpriornotice.

Dynamic best ideas approach with opportunistic bias

Source:AllianzGlobalInvestors.Theaboveisforillustrativepurposesonlyandisnotarecommendationoradvicetobuyorsell.Thereisnoguaranteethattheseinvestmentstrategiesandprocesseswillbeeffectiveunderallmarketconditionsandinvestorsshouldevaluatetheirabilitytoinvestforalong-termbasedontheirindividualriskprofile,especiallyduringperiodsofdownturninthemarket.#Source:IDS.BasedonhistoricalyieldsofAllianzFlexiAsiaBondClassAM(USD)Dis.fromitsinceptionon3July2012till30June2017.

Key Product Features

HistoricalYTM:4-6%#

Rotatesacrosshardcurrencyandlocalcurrencybonds;highyieldandinvestment

grade,corporatesandsovereigns

Nolimitsonsectorsorindividualcountries.

Targetsinvestmentgradeaverageportfolio

Durationrangeof0-10years;hedgingstrategiesforrates,

currencyandcredits

Generate attractive yield

Invests across the entire Asian fixed income universe

Best ideas approach – no benchmark constraints

Overall higher quality portfolio

Active management of downside risks

Korea6.1

AllianzFlexiAsiaBond

Investment hotline: +65 6438 0828

Source:AllfunddataquotedareAllianzGlobalInvestors,asat30September2017,unlessstatedotherwise.1 DividendpaymentsareapplicableforClassAMDis(monthlydistribution)andforreferenceonly.Yieldsarenotguaranteed,dividendmay

bepaidoutfromcapital.Positivedistributionyielddoesnotimplypositivereturn.Fordetails,pleaserefertotheFund’sdistributionpolicydisclosedintheofferingdocuments.

2 Asian InvestmentGradeCorporaterepresentedby JACI InvestmentGradeCorporateTotalReturn Index;AsianHighYieldCorporaterepresentedbyJACINon-InvestmentGradeTotalReturnIndex;AsianGovernmentrepresentedbyCitigroupAsianGovernmentBondIndexfrom2009onwards.Priorto2009,theHSBCAsianBondIndexisused(includes10-20%corporates).

3 TheFundsizequotedincludesallshareclassesoftheFund.4 TheAll-in-Feeincludestheexpensespreviouslycalledmanagementandadministrationfees.5 TotalExpenseRatio(TER):Totalcost(excepttransactioncosts)chargedtotheFundduringthelastfinancialyear(asat30/09/2014)

expressedasaratiooftheFund’saverageNAV.Forshareclassesthathavebeeninceptedfor lessthanoneyearasatcloseofthelastfinancialyear(pleaserefertotheInceptionDateintheFundDetailstable),theTERwillbeannualized.Forshareclassesinceptedafterthecloseofthelastfinancialyear,theTERwillbereflectedasN/A.

6 Source:Morningstar,asat31August2017.Copyright©2017MorningstarAsiaLimited(“Morningstar”).AllRightsReserved.Theinformationcontainedherein:(1)isproprietarytoMorningstarand/oritscontentproviders;(2)maynotbecopiedordistributed;and(3)isnotwarrantedtobeaccurate,completeortimely.NeitherMorningstarnoritscontentprovidersareresponsibleforanydamagesorlossesarisingfromanyuseofthisinformation.Pastperformanceisnoguaranteeoffutureresults.

Informationhereinisbasedonsourceswebelievetobeaccurateandreliableasatthedateitwasmade.Wereservetherighttoreviseanyinformationhereinatanytimewithoutnotice.Noofferorsolicitationtobuyorsellsecuritiesandnoinvestmentadviceorrecommendationismadeherein.Inmakinginvestmentdecisions,investorsshouldnotrelysolelyonthismaterialbutshouldseekindependentprofessionaladvice.However,ifyouchoosenottoseekprofessionaladvice,youshouldconsiderthesuitabilityoftheproductforyourself.Pastperformanceofthefundmanager(s)andthefundisnotindicativeoffutureperformance.PricesofunitsintheFundandtheincomefromthem,ifany,mayfallaswellasriseandcannotbeguaranteed.DistributionpaymentsoftheFund,whereapplicable,mayatthesolediscretionoftheManager,bemadeoutofeitherincomeand/ornetcapitalgainsorcapitaloftheFund.Asaresult,itmayreducetheFund’snetassetvalue.ThedividendyieldsandpayoutsarenotguaranteedandmightchangedependingonthemarketconditionsorattheManager’sdiscretion.Investmentinvolvesrisksincludingthepossiblelossofprincipalamountinvestedandrisksassociatedwithinvestmentinemergingandlessdevelopedmarkets.TheFundmayinvestinfinancialderivativeinstrumentsand/orstructuredproductsandbesubjecttovariousrisks(includingcounterparty,liquidity,creditandmarketrisksetc.). Investinginfixedincomeinstruments(ifapplicable)mayexposeinvestorstovariousrisks, includingbutnotlimitedtocreditworthiness, interestrate, liquidityandrestrictedflexibilityrisks.Changestotheeconomicenvironmentandmarketconditionsmayaffecttheserisks,resultinginanadverseeffecttothevalueoftheinvestment.Duringperiodsofrisingnominalinterestrates,thevaluesoffixedincomeinstruments(includingshortpositionswithrespecttofixedincomeinstruments)aregenerallyexpectedtodecline.Conversely,duringperiodsofdeclininginterestrates,thevaluesaregenerallyexpectedtorise.Liquidityriskmaypossiblydelayorpreventaccountwithdrawalsorredemptions. Pastperformance,oranyprediction,projectionorforecast, isnot indicativeoffutureperformance.InvestorsshouldreadtheProspectusobtainablefromAllianzGlobalInvestorsSingaporeLimitedoranyofitsappointeddistributorsforfurtherdetailsincludingtheriskfactors,beforeinvesting.ThismaterialhasnotbeenreviewedbytheMonetaryAuthorityofSingapore(MAS).MASauthorization/recognitionisnotarecommendationorendorsement.TheissuerofthismaterialisAllianzGlobalInvestorsSingaporeLimited(12MarinaView,#13-02AsiaSquareTower2,Singapore018961,CompanyRegistrationNo.199907169Z).

Fund HighlightsTop 10 Holdings

Country %ALLIANZDYNASIANHY-W OTHERS 6.7TEWOOGROUPFINNO2FIX4.500%16.12.19 CHINA 2.9FRANSHIONBRILLIANTLTDPERPFIXTOFLOAT4.000%03.01.2198 CHINA 2.6

LENDLEASEUSCAPITALINCEMTNFIX4.500%26.05.26 AUSTRALIA 2.5HUARONGFINANCE2017COPERPFIXTOFLOAT4.500%24.07.2198 CHINA 2.5

DELLINTLLC/EMCCORPREGSFIX6.020%15.06.26 UNITEDSTATES 2.4CCBLIFEINSURANCEFIXTOFLOAT4.500%21.04.77 CHINA 2.3HUARONGFINANCEIIEMTNFIX5.500%16.01.25 CHINA 2.2BHARTIAIRTELINTERNATIOREGSFIX5.350%20.05.24 INDIA 2.0HSBCHOLDINGSPLC*CONVFIXTOFLOAT6.000%22.11.2198

UNITEDKINGDOM

2.0

Total 28.1

Fund Details

Class AM(USD) Dis.

Class AM(SGD) Dis.

Class AM(H2-AUD) Dis.

Class AM(H2-EUR) Dis.

Class AM(H2-GBP) Dis.

Class AM(H2-RMB) Dis.

Class AM(H2-SGD) Dis.

FundManager DavidTan

FundSize3 USD536.24m

InitialFee Upto5%

All-in-Fee4 1.50%p.a.

TotalExpenseRatio5 1.53% N/A 1.53% 1.53% 1.52% 1.52% 1.53%

UnitNAV USD8.84 SGD9.74 AUD8.76 EUR8.44 GBP8.43 CNY8.98 SGD8.42

InceptionDate 03/07/2012 17/10/2016 03/07/2012 01/03/2013 01/03/2013 03/07/2012 01/03/2013

DividendFrequency1 Monthly Monthly Monthly Monthly Monthly Monthly Monthly

ISINCode LU0745992734 LU1492452518 LU0706718243 LU0706718672 LU0706718326 LU0774780943 LU0706718169

BloombergTicker AFABAMULX ALFABAMLX AFAMH2ALX ALFMH2ELX ALFMH2GLX AFAMH2RLX ALFMH2SLX

Average Coupon 5.50%Effective Duration 4.63years

Average Credit Quality BBB-

Statistics Summary

Currency Allocation (%)

KRW0.1CNH0.5

USD95.0

Country Allocation (%)

India8.5

China30.6

Australia11.6

HongKong5.0

Indonesia5.4

Singapore2.8

Japan3.0

Liquidity5.5

Others13.7

SGD2.4

6

INR0.6

UnitedStates4.3

UnitedKingdom3.5

AUD1.5

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